Swissness: Ordinances and Transitory Rules in Force

Overview

“Swiss made” is globally seen as a valuable label in the business world. Still, not every product with this labelling was (mainly) produced in Switzerland. There are a lot of freeriders who adopt it to gain benefits. The purpose of the Swissness Regulations is to prevent unrightful use of the label “Swiss made” (see BR-News of 16 February 2016).

On 1 January 2017 the so-called “Swissness”-Regulations dealing with specific requirements to be complied with when using a “Swiss”-claim for products came into force (for more specific information on the new requirements see: BR-News of 16 February 2016 and BR-News of 17 June 2016):

• The revised Federal Statute on Trademarks and Indications of Geographic Origins includes in art. 47 et seq. the main Swissness framework.
• The revised Ordinance on Trademarks provides new requirements for industrial products and services.
• The new Ordinance on the Use of the Swiss Geographic Origin for Foodstuff includes requirements for the Swissness of Foodstuffs.
• The Ordinance on the Use of “Swissness”-Claims for Watches was revised. It sets forth higher standards to be complied with for “made in Switzerland” watches.
• The Act and the Ordinance on Coats of Arms was revised.
• The Ordinance on the Use of “Swissness”-Claims for Cosmetic Products, which was adopted by the Swiss government on 23 November 2016.

Ordinance on the Use of “Swissness”-Claims for Cosmetic Products

The “Swissness”-regulations for industrial products do not appropriately deal with the specific features of cosmetic products. Therefore, the cosmetic industry associations decided to draft a specific Swissness-Ordinance for cosmetic products. The Ordinance sets forth three main requirements:

• Firstly, cosmetic products must meet the requirements of the Federal Statute on Trademarks and Indications of Geographic Origins. 60 percent of the manufacturing costs have to incur in Switzerland. The ordinance defines the costs that are included in the term “manufacturing costs”. Not included are, for example, the packaging costs.
• Secondly, 80 percent of the costs for research, development and production for cosmetic products, i.e. manufacturing costs minus cost of materials, have to accrue in Switzerland. The reason for this cosmetic-specific requirement is that the ingredients for cosmetic products are usually chemical substances that are world-wide manufactured as standard industrial products. The geographic origin of such ingredients does therefore not significantly affect the quality of a cosmetic product.
• Thirdly, certain manufacturing steps, which are essential for the quality of a cosmetic product, must be performed in Switzerland. The respective steps are the manufacturing of the bulk, whereas the bulk is the mix of all substances of the product prior to the filling, the filling of the cosmetic product, and the quality control and certification.

Art. 5 of the Ordinance permits that Swissness claims may be used for specific manufacturing steps that are entirely performed in Switzerland (for example, “Swiss Engineering”, “Swiss Research”). It is, however, important that such claims for specific manufacturing steps are not used in a way that misleads customers with respect to the origin of the entire product. Furthermore, the Swiss flag may not be used in connection with such Swissness claims for specific manufacturing steps.

Another noteworthy provision is Art. 6 of the Ordinance. Under certain circumstances it is permissible to label certain ingredients of the cosmetic product as “Swiss-made”, such as “includes alpine herbes from Switzerland” (but not the product in its entirety). However, Swissness claims may only be used for ingredients if those ingredients are eponymous or characteristic for the respective cosmetic product and if those ingredients origin entirely from Switzerland.

Exceptions from the Swissness-calculation for Foodstuff

The Ordinance on the Use of “Swissness”-Claims for Foodstuff of the Federal Department for Economy, Education and Research was adopted on 15 November 2016 and came into force on 1 January 2017.

The Ordinance of the Federal Department executes art. 48b para. 3 lit. b of the revised Federal Statute on Trademarks and Indications of Geographic Origins and art. 8 and 9 of the Ordinance on the Use of the Swiss Geographic Origin for Foodstuff. The mentioned provisions exclude ingredients, which are temporarily not available in Switzerland or not available for specific purposes, from the calculation of the product weight. The product weight is essential for the Swissness of foodstuffs (80% of the product weight must be ingredients with Swiss origin).

The Ordinance includes an extensive list with raw materials that have not to be considered for the calculation of the Swissness minimal proportion for foodstuff. There are 58 exceptions listed in the Ordinance.

Those exceptions apply only temporary and will be reviewed periodically. The exceptions will expire at the end of 2018.

Transitory Provisions: Explanation of the Swiss Federal Institute of Intellectual Property

The new Swissness regulations may affect trademark applications and / or existing trademark registrations. In specific cases, registered trademarks consists of indications of geographic origins. If the respective geographic origin refers to Switzerland, the Swissness regulations apply to such trademarks. Such trademarks may only be registered or protected for products and services, which comply with the Swissness requirements. Furthermore, it was prohibited under the previous regulations to use the Swiss flag in connection with products (the use of the Swiss flag was only permitted in connection with services). This means that figurative trademarks including a Swiss flag may now be protected for products, if the Swissness requirements are complied with.

The Swiss Federal Institute of Intellectual Property (“IGE”) explained how the registrations of “Swissness” trademarks will be handled in the transitional period (see IGE-Newsletter 2016/11 of 30 November 2016).

IGE sets out two main rules:

• Trademarks that may be protected only under the new Swissness regulations must not have an application date prior to 1 January 2017.
• The new Swissness requirements will be applied to all trademark registration proceedings still pending on 1 January 2017.

This transitory rules have the following effect:

• Starting on 1 January 2017, trademarks that consists of a Swiss geographic origin and that are protected for services will be “limited”, i.e. it is emphasized in the services list of the trademark that all aforementioned services have Swiss origin.

The newly enacted Ordinance on Trademarks and Indications of Geographic Origins does not only deal with Swissness requirements. The Ordinance was also revised regarding other aspects relevant for trademark applications and registrations. The IGE Newsletter 2016/11 also includes transitory provisions with regard to these other new provisions.

Further information (mostly available only in German):

• BR-News: «Der Bundesrat genehmigt die vier Swissness-Ausführungsverordnungen»
• BR-News: «Swissness-Update: Revised Ordinance on the Use of “Swissness”-Claims for Watches approved» (English)
• BR-News: «Update to the Swissness Regulation: „Wo Schweiz drauf steht, muss auch Schweiz drin sein“» (English)
• BR-News: «Bundesrat: Swissness-Ausführungsverordnungen gehen in Vernehmlassung»
• Erläuterungen zur Verordnung über die Verwendung von schweizerischen Herkunftsangaben für kosmetische Mittel vom 23. November 2016
• Medienmitteilung des Bundes: Stärkung von “Swissness” bei Kosmetika: Neue “Swiss made”-Verordnung tritt auf den 1. Januar 2017 in Kraft
• IGE-Newsletter 2016/11